Although I feel I am wasting my time right now, I will try to help out the paper traders here with a TA look at the paper silver chart. This is the daily.
From the April Run up we had what calls irrational paper exuberance. Trust me, I think Silver should already be at $200, but on paper and using algorithms, that run was fast, and the charts clearly show it needed to retrace to the MA. That being said, without 5 margin hikes in 8 days I think we could have kept going to $100 and beyond, but then Blythe and JPM would be toast and thats the end of that story.
RSI: Shows a decline to the 30 from the top in about 6 trading days. This has never pierced the 70 line since, mainly because as the summer went on, so did the margin hikes, and that's the end of that story. What we have now is an oversold RSI under the 30 algo, which means we are do for a pop. Could it move lower? Yup, it could stay in that red under 30, just as long it stayed in the blue 80 in April.
MACD: Fully confirms the RSI. BUT, in May we had to come down from the 3 into the -2. Now we have gone from 1 to -2 and counting. This tells me their is ZERO speculation left in this trade. The specs were wiped out in May, never to return. The margins have killed this trade.
Price: Although the recent move down felt bigger, it wasnt. And take away the $26 overnight Blythe 3 am print, and its looks a lot better. The May session was worse.
Where do we go from here?
In a normal market, we would bounce and test the upper band of that MA between $36-39 and then retrace and test again. My heart tells me this is it and to buy here, which I did (physical not paper). The reason I have not purchased paper silver here is that it may go lower. But my GUT also tells me we may see more downside on an Asian Holiday attack and especially before the Oct 18th CFTC meeting.
If you are thinking to yourself, how does that make any sense, I'll tell you why it makes PERFECT sense:
I am now rotating paper profits (and losses) into physical. So I am cost averaging so to speak into the physical metal 90% silver 10% gold. The reason for my recent purchase was because of a 45% move down in 3 days. Thus, it was on sale 45%. If you are waiting for the 100% sale to $0, you must be in Disney land.
But but but some say its going lower! So. You think I have the time to sell my physical? D0 you think I'm stacking my phyzz to sell it now? I'm buying EOW (End Of World) Insurance. I will pay my premium (PUT options) and one day, get it all back. Now you know where I stand on this 'trade': I think Chairsatan Bernank will print more along with everyone of his central bank cronies. They must keep the ponzi inflation going-deflation is NOT an option, I hope everyone realizes this. Some say he is done printing. I say he is not. Thats not to say he might be done this year. This is a long term turtle race play. Get used to it. Its made this way to shake shake shake you.
So from here if we see $22-24, which we might, I will buy more. And then at that point I will not sell my physical either. I will sell my PUT options, and buy even more phyzz, thanking Blythe for her fantastic derivative insurance scam. But dont be so stupid not to buy some here, as this MIGHT be the bottom. And I dont want to hear ANY crying if it is, and then see the donkeys chase it up and start buying at $40-$50 again! Dont want to hear it, because on a weekly chart we are forming a very long doji which might encompass the bottom here.
I am past the point of buying phyzz for investment. I can buy paper silver option and juniors for investment. I buy the phyzz for security, wealth preservation, and survival.
Any questions let me know if you are confused as to what I am doing.
Site is 99% ready. I am assuming a Saturday/Sunday launch for good.